ACCT - Capital Projects Funds and Debt Service Funds Problem

	Capital Projects Funds and Debt Service Funds

	Fund-based		Governmental-based

1.	On January 1, 2010, approval was obtained to begin construstion of a new city hall. As a result
	of this approval, $2,800,000 in 5-year serial bonds,which a face interest rate of 7%, were sold
	at 104 (an effective rate of 6%). Principal and interest payments are made semiannually beginning
	July 1, 2010.The premium is to be used for debt payments for principal and interest.

	January 1, 2010

CPF		GT




DSF



2.	On January 3, 2010, a $2,800,000 contract with GoodBuild Construction was signed for the construction.

	January 3, 2010

CPF		GT



3.	On June 30, 2010, a bill for $1,400,000 was received from GoodBuild as a result of one-half of the work on the construction being completed.

	June 30, 2010

CPF		GT



CPF		GT



4.	On July 1, 2010, the first debt payment for capital project bond was made.

	July 1, 2010

DSF		GT





5.	On July 15, 2010, the bill from GoodBuild was paid , less a 10% retainage to ensure performance.

	July 15, 2010

CPF		GT







6.	On October 1, 2010, a bill for $1,400,000 was received from GoodBuild in recognition of the completion of work on the city hall addition

	Oct. 1, 2010

CPF		GT



CPF		GT







7.	On November 3, 2010, after approval by the city inspectors, all amounts owed to GoodBuild were paid.

	Nov. 3, 2010

CPF		GT




8.	On January 1, 2011, the next payment on the capital project bond was made.

	Jan. 1, 2011

DSF		GT









9.	On August 1, 2012, the city entered into a capital lease agreement to purchase new equipment for its road crews. The agreement called for an initial
	payment of $12,000, with eight more equil annual payments of $15,000 beginning August 1, 2013. The city's normal cost of borrowing is 8%. The
	initial payment was made as agreed and the equipment was purchased. The General Fund handled all activities related to this transaction.

	Aug. 1, 2012

GF		GT



10.	On August 1, 2013, the first annual payment is made on the capital lease agreement.

	Aug. 1, 2013

DSF		GT



11.	On December 31, 2013, depreciation of $300,000 is recorded as appropriate for all govermental capital assets.

	Dec. 31, 2013

DFS		GT

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